Karl Claxton says the patients who lose out are invisible and have no say in the argument over how limited NHS resources are spent.
Photograph: eye35/Alamy

The NHS is doing more harm than good by approving expensive drugs for a limited number of conditions such as advanced cancer, which use up funds that would benefit other parts of the health service, according to an analysis by a leading group of health economists.

The analysis suggests that substantial numbers of NHS patients are suffering harm and some will die early because money that could be spent on their treatment goes instead to pay for costly new drugs.

The National Institute for Health and Care Excellence has a threshold of up to £30,000 for a drug that gives a patient a year of good-quality life. But Karl Claxton, professor of health economics at the University of York, and his colleagues argue that the threshold should be dropped to £13,000. Above that level, other patients will pay the price in inferior treatment.

Claxton said the study suggested that the health service is paying too much for pharmaceutical drugs. “I think the implications of this work are that if we stopped spending money on drugs that are more then £13,000 per quality-adjusted life year, we would improve health outcomes overall for the NHS,” he said .

Claxton says the patients who lose out are invisible and have no say in the argument over how limited NHS resources are spent – by contrast patients with conditions such as advanced cancer are often featured in the media whenever a new drug with a very expensive price tag is turned down by Nice.

The work for the first time quantifies the potential harm to other patients, Claxton said. “We start to see the real impact that additional costs have on NHS patients. We start to make the NHS patients that bear the real cost of new and more expensive drugs more real,” he said.

The analysis looks at the amount the NHS has to spend to give a patient a year of good-quality life on an expensive new drug and how many of these quality-adjusted life years (QALYs) will be lost to other sorts of patients as a result of the reduced amount of money in local providers’ budgets.

There are beneficiaries [of new drugs] but the people who bear the costs are just as real

Karl Claxton

If Nice approves a drug that costs £20,000 per QALY and the NHS spends £10 million on that drug, there would be a gain of 500 years of quality life among the patients who get the new drug – but a loss of 770 QALYs elsewhere in the NHS, making a net loss of 270 QALYs, the paper in the Health Technology Assessment Journal finds. At £50,000, Claxton and colleagues say 200 QALYs would be gained, implying a net loss of 573 years of quality life.

Patients are harmed because the drugs bill depletes NHS budgets locally, says Claxton. That affects how long people have to wait for treatment, as well as the sort of treatment – be it surgery, drugs or other care – they get. It is not possible to put names and faces to those who suffer harm, but the analysis suggests there will be more deaths from heart disease and stroke, as well as cancer itself, as a result. And people with respiratory diseases such as asthma and chronic obstructive pulmonary disease (COPD), neurological diseases and mental health problems will suffer a reduced quality of life.

The research was publicly funded by the Medical Research Council and the National Institute of Health Research. “It is starting to redress the balance,” Claxton said. “There are beneficiaries (but) the people who bear the costs are just as real – it’s just that they happen to be unidentified and you can’t interview them. But they are real people who are dying as a consequence of additional costs.”

He said a new accountable and predictable pricing system was needed for drugs. There also needed to be discussion about “the health consequences of using NHS resources to support a multinational pharmaceutical sector”.

Sir Andrew Dillon, chief executive of Nice, denied that it was doing more harm than good, but acknowledged there was a price to pay for accepting innovative new drugs with high costs into the NHS. The question was where we should strike the balance, he said.

“That’s always been the case that when you choose to invest in something new – often with real uncertainties about the benefits, often paying a premium price because it is new and you need manufacturers to make their investment and take their own risks – it’s always been the case that it will displace other things,” he said.

Both he and Claxton called for a wider debate on what the NHS should pay for, and at what cost. “Before anybody makes a decision about putting more money into the system or changing the threshold, we do need a clearer definition of what the NHS is. Is it there for everybody regardless of need? Yes it is. The NHS does its best for all of us,” said Dillon. But it is sometimes said that the NHS is going to survive and thrive on innovation and there is a need to reconcile “the eternal problem of demand exceeding supply”. There needed to be “a really coherent narrative for the NHS”, he said.